resources and stakeholders, including
• interviews with representatives of four
outside law firms and members of two
other in-house legal departments, Nextera
(formerly Florida Power and Light) and
United Health Group
• reviewing company budget information for
• research on alternative fee arrangements
• identifying materials related to cost savings,
client structures, and so forth.
The committee eventually issued 10
recommendations in three major areas: budgeting
and forecasting, cost reductions and efficiency
improvements, and implementation tools.
The process definitely generated some surprises:
“I thought people would be skeptical or unwilling
to participate. I was expecting to have to twist
arms,” says Altman. “But we discovered that
people felt very strongly about this issue, and
that they were willing participants.”
There was considerable consistency in
committee members’ and interviewees’
observations, not least of which was that the
Legal Department’s budgeting and forecasting
process was cumbersome, time-consuming,
and not very helpful. The consistency of those
observations “told me it was a good process, and
exactly what we ought to be doing,” Altman says.
For each of the 10 recommendations, LES
developed a summary and detailed evaluation
identifying the root cause addressed, an
implementation plan, estimated cost savings,
challenges and risks, and “low-hanging fruit.”
Once the recommendations were accepted, four
management initiatives were adopted:
• Department and individual employee goals
were set and tied to compensation.
• A consultant was retained to review best
practices regarding billing and matter
• Three key business areas—nuclear,
transmission, and energy supply—were
assigned a Legal Department liaison.
• An e-discovery manager was hired.
Six subcommittees were formed to implement
the LES recommendations, overhauling
everything from budget and forecasting to
outside counsel relationships and requirements.
One subcommittee created a playbook that
houses all key department information and
processes in an online database. Another
identified and completed lower-cost options
and alternative fee arrangements with outside
firms, including secondment programs, hiring
contract lawyers, an apprenticeship program,
“loyalty” hours, and so forth; about 25 to 30
percent of Xcel’s outside legal spend is now
under alternative fee arrangements. New
guidelines for outside counsel now define the
relationships; many of these same counsel had
been consulted during the LES research phase.
“The reaction from outside firms was really quite
positive. They have a perspective on lots of
corporate clients and were very willing to work
with us,” Altman says.
The initiative’s results have been meaningful.
Xcel realized a 7. 5 percent reduction in
outside spend in 2014 as compared to 2012,
and it didn’t lose sight of its secondary goal:
maintaining quality of legal services that
business clients require. The Legal Department
realized an increased overall client satisfaction
rating from 5.87 to 6.09.
Application of easy yet highly effective tools to get started on
promoting a lean and high-performing legal department—an inspiring
and easy-to-follow example to departments of all sizes.